Correlation Between Ultra Clean and Vivendi SE

Can any of the company-specific risk be diversified away by investing in both Ultra Clean and Vivendi SE at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Ultra Clean and Vivendi SE into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Ultra Clean Holdings and Vivendi SE, you can compare the effects of market volatilities on Ultra Clean and Vivendi SE and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Ultra Clean with a short position of Vivendi SE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ultra Clean and Vivendi SE.

Diversification Opportunities for Ultra Clean and Vivendi SE

0.51

Correlation Coefficient

Ultra Clean  Vivendi SE

Very weak diversification

The 3 months correlation between Ultra and Vivendi is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Ultra Clean Holdings and Vivendi SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vivendi SE and Ultra Clean is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Ultra Clean Holdings are associated (or correlated) with Vivendi SE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vivendi SE has no effect on the direction of Ultra Clean i.e., Ultra Clean and Vivendi SE go up and down completely randomly.

Pair Corralation between Ultra Clean and Vivendi SE

Assuming the 90 days horizon Ultra Clean Holdings is expected to generate 1.64 times more return on investment than Vivendi SE. However, Ultra Clean is 1.64 times more volatile than Vivendi SE. It trades about 0.07 of its potential returns per unit of risk. Vivendi SE is currently generating about -0.17 per unit of risk. If you would invest  3,400  in Ultra Clean Holdings on September 13, 2024 and sell it today you would earn a total of  120.00  from holding Ultra Clean Holdings or generate 3.53% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	95.65%
Values	Daily Returns

Ultra Clean Holdings  vs.  Vivendi SE

Ultra Clean Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ultra Clean Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Vivendi SE

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Vivendi SE has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Ultra Clean and Vivendi SE

The main advantage of trading using opposite Ultra Clean and Vivendi SE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ultra Clean position performs unexpectedly, Vivendi SE can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Vivendi SE will offset losses from the drop in Vivendi SE's long position.

The idea behind Ultra Clean Holdings and Vivendi SE pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

Check out your portfolio center.

Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.